6/19/2018 A solution for Indian GST implementation for simple procurement scenario using TAXINN | SAP Blogs

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A solution for Indian GST implementation for

simple procurement scenario using TAXINN
June 8, 2017 | 9,714 Views |

Former Member

Goods and Services Tax (GST India)

materials management | sap mm | SAP MM GST(India)

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This is an attempt to incorporate the tax reformation in India- GST via a simple
SAP solution using the existing provisions in ECC 6.0 EHP 6.

Brief Requirement:

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Goods and Services Tax (GST) is an indirect tax throughout India to replace
existing multiple taxes levied by the central and state governments.

Applicable GST rates are determined by the combination Nature of Purchase

and Harmonized System of Nomenclature (HSN) code assigned to material.

CGST Central Goods and Service Tax

SGST State Goods and Service Tax

IGST Integrated Goods and Service Tax

Nature of Purchase Before GST After GST

Goods Purchase within State Excise + VAT CGST + SGST

Goods Purchase inter State Excise + CST IGST

Import Purchase BCD, CVD, AED, CESS, ECESS IGST

Inward branch transfer

Excise/ No Excise No Tax
(Intra State)

Inward branch transfer

Excise/ No Excise IGST
(Inter State)

No tax, only VAT in case

Job work expense CGST + SGST
of Painting contract

Service expense Service Tax CSGT + SGST/ IGST

CGST SGST IGST UGST

2.5 2.5 5 *
GST
RATE % 6 6 12 *
BANDS*
9 9 18 *

14 14 28 *

*Mapped to Material HSN

(Harmonized System Nomenclature)

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Single registration per PAN and state of business for CGST, SGST and IGST

The scenario considered is a simple Procure to Pay cycle where Quotations re

ceived from the Vendor determine the Taxes applicable.

For complex Supply Chain scenarios where multiple goods movements, subco
ntracting, consignment, etc. are involved, this might not be an efficient solution
for GST implementation. SAP recommended Notes and Patches should be fol
lowed in this case.

Configuration Steps:

Steps t-code

Assign Tax Procedure to Country OBBG

Define Tax Access Sequence OBQ2/OBYZ

Define Condition Types(Tax) OBQ1/OBYZ

Create account keys OBCN

Define Tax procedure OBQ3/OBYZ

Assign GL to account keys & GL OB40

Create Tax code in Country FTXP

SM30 –
Maintain Tax Codes for Excise Duties Using Condition Technique
J_1ICONDTAX

Maintain Tax Condition Records FV11

1. Assign Tax Procedure to Country

T-code: OBBG

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2. Define Tax Access Sequence

T-code: OBQ2

Copy Access sequence JTAX and create new sequence ZGST.

Include table 03 for condition value determination based on Country and Tax c
ode.

Non-
deductible tax percentages will be determined based the last table in access.

3. Define Condition Types(Tax)

T-code: OBQ1 or OBYZ

Based on the available information the below listed GST related condition type
s are created:

Tax type Condition Type Description

CGST JICG IN: Central GST

SGST JISG IN: State GST

IGST JIIG IN: Integrated GST

UGST JIUG IN: UnionTer. GST

CGST JICN IN: Central GST – ND

SGST JISN IN: State GST – ND

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IGST JIIN IN: Integrated GST – ND

UGST JIUN IN: UnionTer. GST – ND

CGST JICR IN: CGST Rev. Charge

SGST JISR IN: SGST Rev. Charge

IGST JIIR IN: IGST Rev. Charge

IGST JIMD IN: Import GST deduct

IGST JIMN IN: Import GST – ND

ND- non-deductible

4. Create Account Keys

T-code: OBCN

Create new Account keys for all conditions who need to be assigned individual
GLs

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Non-deductible conditions can be assigned to standard key NVV

5. Define Tax procedure

T-code: OBQ3

Append your GST condition types to TAXINN tax procedure as shown below;

6. Assign GL to account keys & GL

T-code: OB40

Assign GLs to transaction key at chart accounts level. Separate GLs can be a
ssigned for each Tax code.

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7. Create Tax Codes in Country IN

T-code: FTXP

Create tax codes in Country India

Tax codes are required to be captured in a TR separately;

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FTXP-Tax Code-Transport-Export and save in TR

8. Maintain Tax Codes for Excise Duties Using Condition Technique

T-code: SM30

table: J_1ICONDTAX

This is an important step as we are using TAXINN tax procedure. If this is not
maintained tax code does not work in PO.

9. Maintain Tax Condition Records

T-code: FV11

Complete this master data activity and maintain the required tax percentages
according to you access sequence/key combination for them to be determined
in PO.

The below message may appear while maintaining Condition Record;

Tax ID G2 cannot be checked (there are several/no tax re

cords)
Message no. VK242

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This is because we did not maintain any Tax Percent. Rate in FTXP. This will n
ot affect tax determination in PO.

Alert Moderator

8 Comments
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Former Member

June 16, 2017 at 11:48 am

Simple and Good!

Thanks for insight on GST.

PG

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Former Member

June 24, 2017 at 12:27 pm

Hi Mr.Archit,

Thanks for your effort & the work done in simple way…

And, expecting the same on Subcontracting, Consignment & STO processes.

Thanks…

Phanikumar Valiveti

July 27, 2017 at 5:26 am

Good and Simple document to understand..

But SM30 Tax code?GL maintenance should be table J_1iT030K_V is missing..

Phanikumar

Former Member

October 18, 2017 at 5:55 am

Thank you for sharing this simple documentation about GST implementation using
TAXINN. So with the help of SAP solutions or SAP tax procedures, you can now
embrace the GST with minimal disruption to your business. You can enroll yourself in
SAP GST training for deeply clearing the concepts of GST

Former Member

November 9, 2017 at 3:55 am

Thanks for sharing the valuable information about GST implementation.

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Former Member

December 7, 2017 at 11:23 am

I need small clarification in your example you have take 5% tax code that means I need
to create multiple tax code for different-different % like 5%, 12%,18% and 28% etc. and
have to maintain in FV11 and FTXP.

Former Member

March 21, 2018 at 11:56 am

what is solution of ” tax code 05 (for import) does not exist in procedure taxin IN. but
while tax code 05 already maintained in taxin .

Sattaiah Gundu

April 13, 2018 at 7:28 am

Really Excellent and Useful document.

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